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IT ISN'T EVERY WEEK WHEN investors' myriad concerns can be summed up in one short question: How low can it go?

The question was asked about borrowing costs after the Federal Reserve cut interest rates last week for the second time in eight days -- this time to 3% from 3.5%. Almost immediately, economists began anticipating another half-percentage-point cut that they say is needed to jump-start the economy. But the worry mounts, as reader Tom Kurtz put it in a recent e-mail that the Fed is running out of weaponry, with two bullets left in its six-chamber revolver.

That same question also swirled around gross domestic product after the government said the economy grew just 0.6% in the fourth quarter -- down sharply from the third quarter's 4.9% expansion. Desperate government attempts to goose consumer spending -- a tax rebate! slashed interest rates! -- could keep the economic contraction as short and shallow as an Entourage episode. But rude surprises -- like a report on Friday showing 17,000 jobs cut in January -- kept popping up to muddle the picture and thicken the suspense.

Most curiously, the how-low question was asked in the stock market even as stocks surged resoundingly last week. Mistrustful of market moves, traders continued to eye the potential downside even as the Standard & Poor's 500 index managed its sharpest bounce in years.

Still, traders remained cagey despite the rally. Within less than two hours on Wednesday afternoon, when the Dow Jones Industrial Average jumped 201 points after the rate cut, only to plummet 239 points in a rush of profit taking, the bearish chorus quickly pointed a collective finger: See? That's how brief bear-market rallies can be!

The Dow would finish the week up 536 points, or 4.4%, to 12,743 for its best week since March 2003. The S&P 500 racked up its biggest weekly percentage gain in nearly five years when it climbed 65, or 4.9%, to 1395. It had fallen 19% from its October peak to its intraday low of 1270 on Jan. 23, but since then had bounced back 10% in just eight days.

The Nasdaq Composite Index snapped a five-week losing streak, adding 87, or 3.7%, to 2413. But small stocks that were hardest hit last year beat them all as the Russell 2000 index rallied 42, or 6.1%, to 731.

The bounce helped soothe the sting of a dreary January. Quite ominously (for fans of foreshadowing), the Dow had ended the first month of this year down 4.6%. The S&P 500 had fallen 6.1%, the Nasdaq 9.9% (for its worst January ever) while the Russell 2000 skidded 6.9%. The stock market had suffered a worse January in only five other years since 1926; four of those had occurred near recessions.

CAN THIS STOCK BOUNCE be trusted? The S&P 500 skidded to its January low accompanied by the kind of heavy selling often seen at stock-market bottoms. For example, the crop of New York Stock Exchange stocks falling to 52-week lows had swelled to 859 -- near levels seen in July 2002.

Last week, citing the "sharp decline in the stock market combined with soaring values for high-quality bonds," LPL Financial nudged up its allocation to stocks to 70% from 65% while cutting bonds. A week earlier, Banc of America Securities prodded its stock allocation up five percentage points to 65%. Nearly all Street firms' allocations are still below their peak levels.

On the other hand, the correction might eventually prove more severe, since investors are facing the kind of credit degradation not seen in previous pullbacks, and housing prices are still 10% to 30% above fair value. "Declining employment, falling consumer confidence and high oil prices strongly suggest consumer spending will slow," he says. Profit margins near all-time highs of 8.2% also could slip toward the 30-year average of 5%.

Merrill Lynch economist David Rosenberg is among those wary of this bounce. With stocks pushing to a double top last July and then again in October, and recessions typically beginning three to six months after a stock-market peak, he thinks a recession has just begun in January and, if it were to last a typical 10 months, might end in October. "The stock market has never bottomed in the first month of recession," he says, "so it certainly would be different this time" if the January low was it.

If he's right -- that question again -- how low could stocks go? Abhijit Chakrabortti, Morgan Stanley's global equity strategist, recently said his worst-case scenario is for the S&P 500 to fall to 1155. That assumes per-share earnings will shrink nearly 20% from $85 to about $70, and the market will trade at 16.5 times trailing earnings, near its 60-year average. At that level, he'd "become comfortable changing our negative equities call and stepping up to buy the market."

LIKE ROGER CLEMENS, profit forecasts have developed a credibility problem. Expectations for S&P 500 earnings to grow 16% in 2008 seem to earn the most disdain.

So far, 58.9% of companies that have reported earnings have beaten estimates -- below the 10-year average of 61%, says Bespoke Investment Group. Stocks of companies beating estimates have risen by an average 3.45% the next session, while those missing the mark decline 2.29%. "This gives the earnings season a positive bias so far," says Bespoke co-founder Justin Walters.

Investor fear is most apparent in consumer-discretionary and financial stocks. With investors bracing for the worst, consumer-discretionary companies that beat estimates have jumped 3.6%, while those missing pulled back just 0.4%. The sigh of relief is even louder in financials, where those trumping guidance have rallied 3.7%, and even those missing still crept up 0.3%. All in all, these two battered groups posted the biggest post-earnings gain among the various sectors, and both continued to build on their first-day gain of about 2.1% in the days after.

In contrast, defensive hideouts that have already attracted hordes struggled to advance after reporting earnings, with consumer staples managing an average one-day gain of just 0.4% and health care pulling back 0.5%.

Technology stocks, meanwhile, seem to have attracted investors who are lowering their sights. Nearly two-thirds of tech stocks have managed to trump estimates so far, and those that do gain 3.7%. But the few that dared miss were roundly pummeled, dropping 5.3%.

Yet Check Point remains a sound defensive bet. Computer security is no less a priority for most businesses even in tough economic times. With its conservative forecast, management had chosen to play it safe and has factored softer demand into its rather beatable guidance.

At about 21, shares trade at 11 times forward earnings, and its debt-free balance sheet and suite of firewall products make Check Point a viable acquisition target should buying return to favor again.

The Providence company makes Cessna jets and Bell helicopters for both military and commercial customers, as well as a broad range of aircraft and surveillance equipment and tools. Because business jets go where profits go, fears have increased that corporate America's south-bound profits will send Textron to a harsh landing.

Big Bounce: Rate cuts, Microsoft and selling fatigue gave the Dow its best week in nearly five years. It's up 10% in eight days and is 10% under its October high.

These concerns were only partly assuaged by Textron's recent earnings report. While fourth-quarter profits jumped 31% and beat estimates, a tempered outlook sent the Street scrambling to cut projections. Some analysts have also underestimated the expenses involved with recent plans -- like one to develop a large-cabin intercontinental jet. As a result, Textron shares are trading at 13.9 times 2008 earnings, compared with more than 15 times for many peers.

Yet the combined backlog at Bell, Cessna and Textron Systems had grown from $12.9 billion in 2006 to $18.8 billion at the end of last year -- and that measure of certainty should help Textron in this uncertain market. Textron also benefits from the weak dollar and increasingly global demand for business jets and airplane equipment. Cessna, for example, is nearly sold out of business jets through 2009, and half its orders come from overseas -- thanks to foreign wealth and the increasing embrace of the private jet as a preferred way to fly.

Commercial helicopter demand also is strong, with replacement orders and persistent interest from booming oil and gas, mining and utility industries, notes Citigroup analyst Jeffrey Sprague, who recently upgraded the stock. Among other things, Sprague thinks a recent moderation of Textron's book-to-bill is driven less by waning demand than by limited supply available for delivery.

In fact, all 12 analysts who cover the stock rate it a Buy. Normally, this is a sign that interest has peaked, but the analysts' call has gone largely unheeded in the market sell off. And should the market run into further turbulence, this bullish unanimity will carry more weight with worried investors looking to be airlifted to safety.